Financial Products for Consumers to Choose From
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For the public to participate in the establishments and government agencies' quest to get financing, they can avail of the numerous financial products for consumers being offered. Kinds are identified based on the risk and returns they present. To better decide on which instrument to take, getting to know them would be necessary. Potential creditors are invited to extend their financial assistance to the government departments as well as private companies by taking part in bonds. These bonds are issued for a longer term of repayment and creditors are guaranteed of their profits through the fixed interest rates they predetermine and provide to the issuers. For shorter term needs, Treasury bills otherwise referred to as T bills are also invitations for creditors. They are issued by the government at certain times of the year to gain financing for short term projects. Payments are made in less than a year; in fact, the longest duration for maturation is 6 months in which the creditors get the amount plus the interest rate. Short term notes are more or less similar to government bonds in that their interest rates are fixed; however, they are issued by financing institutions such as banks for a period of one to five years. These tap issues can be subscribed to at anytime of the year unlike government bonds that can only be available four times annually. To participate in the ownership and decision making of, and even get profit from a certain company, paying for shares would be a good way. Investors who provide money for the institutions to finance their needs are guaranteed receiving dividends at a frequency determined by the company itself. Brokerage firms, banks and insurance companies also offer investment funds which are also forms of shares. The only difference is that instead of focusing on the manufacturing of goods or provision of services, their focus is more on real estate assets and insurances. Citizens can also pay for options and warrants which are instruments that would allow them to buy and sell the rights on a share. Options can be exercised for a shorter term than warrants and have lesser chances for increasing capital. Investors and creditors can better decide on what to do with the financial products for consumers if they consult an expert on these matters. This would allow them to better assess their potentials of earning more by knowing all the rules and regulations governing the instruments.